Solar demand to grow as costs go down

Elaine Ulrich (left) of the U.S. Department of Energy and Ethan Zindler (right) join the Center for Strategic and International Studies panel on solar energy.

(A previous headline incorrectly mixed up demand for solar with demand for energy more broadly.)

The market for solar energy has exploded in the United States and internationally and should continue to expand with demand for energy almost doubling by 2030, experts said Tuesday.

Investment in clean energy worldwide totaled $254 billion last year, said policy analyst Ethan Zindler of Bloomberg New Energy Finance, a provider of data, research and news on the clean and low-carbon energy sector.

Zindler, who spoke on a panel hosted by Center for Strategic and International Studies, said investments in solar power declined for two consecutive years since 2011, even though projections remain positive. Investment fell 9% in 2012 and 12% in 2013, according to Bloomberg data.

The panel Tuesday was the third session of the CSIS Frontier Energy Series, which examines energy technologies and innovations in the context of American economic growth. The solar market has seen continual expansion and cost reduction, but experts say it won’t replace fossil fuels any time soon.

One major growth market has been China, which became the world’s largest solar market in 2013, in addition to being the biggest producer of solar. Zindler also said new markets may emerge in the developing world as technologies become more affordable.

The solar market is becoming economical without heavy subsidization, Zindler said. In California, he said, solar costs $4.50 to $5.00 per watt, and the module itself costs less than $1 per watt. The rest of the cost comes from service expenses, which Zindler said leaves a lot of room for costs going down.

Another panelist, Yuri Horwitz, said the solar energy industry has “come too far to be stopped” when it comes to the growing energy market. Horwitz, chief executive officer at Sol Systems, a Washington-based firm, said third-party financing strengthened the solar industry in the early 2000s — and U.S. solar investment remains strong, despite declining investment from venture capitalists.

Trade disputes, with China in particular, have been a big concern, with two rounds of U.S. tariffs so far on Chinese solar, experts noted. The tariffs were a response to harmful export subsidies, said Nova Daly, an international investment, trade and cyber security policy expert.

Trade policies should “make sure you don’t have distortions that take away from the marketplace,” Daly said.

The market is still largely made up of early adopters, experts said. But research and initiatives by institutions including the U.S. Department of Energy will be drive prices down further, making solar an option for more people.